Adams Stirling PLC


QUESTION: Can our common interest development own and operate a credit union or bank for the benefit of the homeowners?

ANSWER: Your association's articles of incorporation establish the purpose for your corporation. Running a credit union is probably not one of them. As a result, if your board set up a credit union it would likely be an ultra vires act unless the membership amended your articles to allow for it.

Ownership & Taxes. There may be laws regarding who may and may not own a credit union. You need to talk to a lawyer who specializes in banking law. You better talk to tax specialist as well since income from business operations will be taxed differently than membership dues. Finally, who would run the credit union? It's tough enough running a homeowners association. A credit union would be another source of potential liability. Gives me the willies just thinking about it.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC